European Commission Approves 2 Billion Euros French Guarantee Scheme to Support Energy-Consuming Companies in the Context of Russia's War Against Ukraine
The
The French measure
These companies are currently facing an increasing level of collateral requirements in light of the rise of the costs of electricity and natural gas. The scheme will be administered by the Caisse Centrale de Reassurance, the state-owned French public reinsurer.
Under this measure, the aid will take form of public counter-guarantees. The latter aim at covering unfunded guarantees issued by financial intermediaries on behalf of companies for the collateral requirements stemming from their energy supply contracts.
The measure will be open to energy-consuming companies active in
The public guarantees will cover up to 90% of the eligible guarantees, which will be equal to or less than the equivalent of three months of invoices. The measure will cover new guarantees granted for energy supply contracts (i) concluded between
The Commission assessed the measure under EU State aid rules, and in particular Article 107(3)(b) of the Treaty on the Functioning of the
The Commission found that the scheme notified by
Furthermore, the public support will come subject to conditions to limit undue distortions of competition, including safeguards to ensure that the advantages of the measure are passed on to the largest extent possible to the final beneficiaries via the financial intermediaries.
The Commission concluded that the scheme will contribute to managing the economic impact of the current crisis in
On this basis, the Commission approved the aid measure under EU State aid rules.
Background
The State aid Temporary Crisis Framework, adopted on
The Temporary Crisis Framework has been amended on
The Temporary Crisis Framework has been further amended on
The Temporary Crisis Framework provides for the following types of aid, which can be granted by Member States:
* Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of
* Liquidity support in form of State guarantees and subsidised loans. In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members.
* Aid to compensate for high energy prices. The aid, which can be granted in any form, will partially compensate companies, in particular intensive energy users, for additional costs due to exceptional gas and electricity price increases. The individual aid amount may be calculated based on either past or present consumption, taking into account the need to keep market incentives to reduce energy consumption and to ensure the continuity of economic activities. In addition, Member States may provide support more flexibly, including to particularly affected energy-intensive sectors, subject to safeguards to avoid overcompensation. Further details on the support possibilities for high energy prices, including on the methodology to calculate individual aid amounts, are available here;
* Measures accelerating the rollout of renewable energy. Member States can set up schemes for investments in renewable energy, including renewable hydrogen, biogas and biomethane, storage and renewable heat, including through heat pumps, with simplified tender procedures that can be quickly implemented, while including sufficient safeguards to protect the level playing field. In particular, Member States can devise schemes for a specific technology, requiring support in view of the particular national energy mix;
* Measures facilitating the decarbonisation of industrial processes. To further accelerate the diversification of energy supplies, Member States can support investments to phase out from fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions. Member States can either (i) set up new tender based schemes, or (ii) directly support projects, without tenders, with certain limits on the share of public support per investment. Specific top-up bonuses would be foreseen for small and medium-sized enterprises as well as for particularly energy efficient solutions; and
* Measures aimed at supporting electricity demand reduction, in line with Regulation (EU) 2022/1854.
The following types of aid are also possible on a case-by-case basis, subject to conditions: (i) support for companies affected by mandatory or voluntary gas curtailment, (ii) support for the filling of gas storages, (iii) transitory and time-limited support for fuel switching to more polluting fossil fuels subject to energy efficiency efforts and to avoiding lock-in effects, (iv) support the provision of insurance or reinsurance to companies transporting goods to and from
Sanctioned Russian-controlled entities will be excluded from the scope of these measures.
The Temporary Crisis Framework includes a number of safeguards:
* Proportional methodology, requiring a link between the amount of aid that can be granted to businesses and the scale of their economic activity and exposure to the economic effects of the crisis;
* Eligibility conditions, for example defining energy intensive users as businesses for which the purchase of energy products amounts to either (i) at least 3% of their production value or turnover in 2021; or (ii) at least 6% of their production value or turnover in the first semester of 2022; and
* Sustainability requirements. Member States are invited to consider, in a non-discriminatory way, setting up requirements related to environmental protection or security of supply when granting aid for additional costs due to exceptionally high gas and electricity prices. Furthermore, beneficiaries of aid for additional energy costs above
The Temporary Crisis Framework, currently in place until
Furthermore, on
On
The non-confidential version of the decision will be made available under the case number SA.106197 in the State aid register on the Commission's competition website (https://competition-policy.ec.europa.eu/index_en) once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the
More information on the Temporary Crisis Framework and other actions taken by the Commission to address the economic impact of
* * *
Original text here: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1182
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